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International Finance

21. Boeing Commercial Airplane Co. manufactures all its planes in the United States and prices them in dollars, even the 50% of its sales destined for overseas markets. Assess Boeing's currency risk. How can it cope with this risk?

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ANSWER. Boeing would have currency risk even in the absence of foreign competition since currency fluctuations will translate its dollar prices into varying amounts of foreign currency to its foreign customers. Given that foreign demand is somewhat responsive to price, and that ...

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